Farmicide

February 28, 2017

Story at-a-glance

U.S. farms once numbered around 6 million (circa 1945), but in 2015 this number had dropped to just over 2 million — about the same number that existed in the mid-1800s

Chapter 12 bankruptcy filings, which apply to farms with less than about $4 million in debt, rose significantly from 2013 to 2016

About 1 in 3 U.S. farms raising grain and other row crops were highly or very highly leveraged in 2015, which means their debts equaled at least 41 percent of their assets

By Dr. Mercola

In 1978, farmers (owners and tenants) and farm workers were the most common jobs in eight U.S. states.1 But the number of farmers in the U.S. has been on the decline for a century, and if grain prices continue to fall we could be facing the largest number of farm closures since the 1980s in the years to come.

U.S. farms once numbered around 6 million (circa 1945), but in 2015 this number had dropped to just over 2 million — about the same number that existed in the mid-1800s. The Wall Street Journal (WSJ) reported that total U.S. acres farmed have also dropped a significant 24 percent, bringing it to just over 900 million acres.2

Farmers that have been working the land for generations are increasingly being forced out of business, unable to make a profit. A worldwide grain glut and rising costs for seeds, fertilizer and equipment have led to some farmers losing more than $120 per acre.

Others, particularly grain farmers, are only able to make ends meet by taking on second non-farming jobs. According to WSJ:3

"From the early 1800s until the Great Depression, the number of U.S. farms grew steadily as pioneers spread west of the Mississippi River. Families typically raised a mix of crops and livestock on a few hundred acres of land at most.

Farms grew bigger and more specialized. Large-scale operations now account for half of U.S. agricultural production … As farm sizes jumped, their numbers fell … "

USDA Spends $7 Billion to Bail Out Farmers

In October 2016, the U.S. Department of Agriculture announced it would be making more than $7 billion in payments to bail out farmers due to market downturns that occurred during the 2015 crop year.4

The payments were intended to "provide reassurance to America's farm families" affected by low commodity prices and unfavorable growing conditions.

As farming has transitioned from a once localized industry to an international one, it's brought with it a new set of challenges for U.S. farmers. Spurred in part by a growing demand for biofuel, about 180 million additional acres of corn and soybeans have been planted around the world over the last decade.

"Corn and wheat output has never been higher, and never has so much grain been bunkered away," WSJ reported. However, U.S. farmers' share of global grain has fallen significantly, from 65 percent in the '70s to 30 percent today, "giving them less sway over prices."5

Changes in the strength of the dollar have also led to major market changes, like Russia changing from the world's largest wheat importer to the largest exporter. WSJ continued:6

"Farmers there [in Russia] planted even more wheat last year to take advantage of the U.S. dollar's recent climb against many currencies.

That encourages Russian farmers to export as much wheat as possible for dollars, which convert to about twice the number of rubles they did three years ago. The strong dollar also allows farmers in some countries to undercut U.S. prices."

As in much of the U.S., farmers in Minnesota faced back-to-back losses in 2015 and 2016, with an average loss of $58 per acre for corn and $3 per acre on soybeans in 2015.7 According to the Star Tribune:8

"Despite [losses], bankers around the region refinanced farmers' debt and lines of credit on favorable terms. But with a second year of losses ahead for many farms, patience among lenders is running thin. A credit crunch now looms that would mark a decisive turn in the farm economy."

After years of steady growth, farm lending by Minnesota-based banks plateaued in 2014, as farmers have bought less equipment and farmland in the wake of falling crop prices. Still, many farmers are struggling to stay afloat.

During the current fiscal year, lenders in the state sent nearly 2,500 notices to farmers at risk of foreclosure (the notices explain the farmer's right to mediation before foreclosure occurs). This is a 20 percent increase in such notices since 2015.9

Debt and Delinquencies Rising Fast Among Midwest Farmers

Like in Minnesota, Midwestern farmers in Illinois, Iowa and Indiana are also facing growing debts they can no longer afford to pay off. When grain prices were high, many farmers took advantage of credit to expand their farms. Then when grain prices tumbled, took on more debt to try to plant their way out.

Reuters analyzed federal data on agricultural lending in Illinois, Indiana and Iowa and found nonperforming bank farm loans increased to more than $288 million in the second quarter of 2016, up from $132.5 million in the second quarter of 2013, which is the year after a corn and soybean price peak.10

Chapter 12 bankruptcy filings, which apply to farms with less than about $4 million in debt, also rose significantly from 2013 to 2016. Also worrisome is the number of "extremely leveraged" farmers, who have debts that total more than 71 percent of their assets.

This category doubled from 2012 to 2015, and according to the Reuters analysis, about 1 in 3 U.S. farms raising grain and other row crops, not including cotton, were highly or very highly leveraged in 2015, which means their debts equaled at least 41 percent of their assets. According to Reuters:11

"Such statistics match up with the stories of agrarian hubris and family desperation that are piling up in coffee shops and courtrooms across the Midwest. The common narrative is a struggle against low grain prices and high debt after years of credit-fueled expansion."

Are We Headed for Another Farm Crisis Like the One in the 1980s?

Is all of this a sign that we're heading for another farm crisis, like the one that occurred in the 1980s? A combination of low crop prices, overwhelming farmer debt, poor growing conditions and other economic and political factors led to massive farm closings — up to 250 an hour, by some estimates.12

A report by Environmental Working Group (EWG) senior analyst, economics, and Craig Cox, EWG Senior VP for agriculture and natural resources, suggests the current farm crisis is more of a myth than anything, spurred by the fatally flawed federal farm subsidy program that continues to "bail out" wealthy farmers, whether they need help or not. According to the report:13

"Since 1995, fully 77 percent of subsidy dollars have gone to just 10 percent of all recipients, most of them members of complex partnerships and joint operations who may never set foot on a farm — let alone drive a tractor.

… The farm subsidy lobby is working overtime to use what it calls a 'farm crisis' to deflect well-deserved criticism of the fatally flawed federal subsidy system that they're desperate to protect. Current economic conditions, however, are nowhere near those of the real farm crisis in the 1980s.

The farm businesses that collect the lion's share of subsidies are not doing nearly as badly as the industry argues, especially compared to the rest of America's families.

The federal farm subsidy system is badly broken. Help should be going to those families that depend on their farms for income and are struggling to stay afloat as production and land costs react to lower crop prices. But that's not what's happening."

The use of cover crops, or planting non-cash crops during the off months, has the potential to increase yields and improve the environment.

Cover crops more than double carbon inputs into the soil,14 and when you add carbon back into the soil the carbon feeds mycorrhizal fungi that eventually produce glomalin, which may be even better than humic acid at retaining water.

This means you naturally limit your irrigation needs and make your garden or fields more resilient during droughts. Cover crops also improve soil structure and reduce erosion.

Together with other regenerative farming techniques, such as diversifying and using cattle, sheep and chickens to graze and fertilize cash crop fields, the use of cover crops helped one farmer save about $200 per acre compared to his conventional farming days, with similar yield — or better.15

Such techniques represent the future of true sustainable farming, but crop-insurance programs, which should be encouraging them, are stymying interest. Kansas regenerative farmer Gail Fuller experienced this firsthand, when his federally funded crop insurance company denied his six-figure claim for compensation during the 2012 drought.

Their basis was Fuller's use of cover crops, which the company requires be killed off before the cash-crop is planted. High winds prevented Fuller from doing so, however, and highlighted one reason why many farmers are reluctant to try different farming practices.

Fuller took the case to court and was eventually given the payment, but there's still a perception among farmers that using cover crops could put their insurance payments at risk. Unfortunately, only 2.6 percent of U.S. croplands are planted with cover crops.16

Food & Environment Reporting Network noted that nearly half of farmers who say they're interested in trying cover crops hold back because of concerns about crop insurance, and a 2015 National Wildlife Federation survey found "over one-third reported that they'd been told by an agent or adjustor that using cover crops could put a claim at risk of denial."17,18

Will Young Farmers Pave the Way for Positive Change?

Our current food system is driven by policy and corporate control. And while those who promote it claim that it's the only way to feed an ever-growing population, it is in fact a highly unsustainable system. It may be financially profitable for a few large corporations, but it's driving the rest of us, including the last "real" farmers, into the poor-house.

While young farmers without much savings are among the most vulnerable to shifts in crop prices, the film "The Greenhorns" demonstrates how we can collectively transform the current industrial monoculture, chemical-based agricultural paradigm into a healthier, more sustainable way of feeding ourselves and our neighbors, while restoring the health of our ailing planet.

"'The Greenhorns' documentary film ... explores the lives of America's young farming community — its spirit, practices, and needs. It is the filmmaker's hope that by broadcasting the stories and voices of these young farmers, we can build the case for those considering a career in agriculture — to embolden them, to entice them, and to recruit them into farming. The production of The Greenhorns is part of our grassroots nonprofit's larger campaign for agricultural reform ...

Today's young farmers are dynamic entrepreneurs, stewards of place. They are involved in local politics, partnering with others, inventing new social institutions, working with mentors, starting their careers as apprentices, borrowing money from the bank, putting in long hours, taking risks, innovating, experimenting... These young farmers have vision: a prosperous, satisfying, sustainable food system."

You can take part in the revolution in a number of ways. If you're a young person deciding on a career, consider organic sustainable farming. You may even consider it if you're looking for a mid-life change. At the very least, you can get personally involved in growing food for your own family.

If you're not inclined to grow your own food, sourcing your foods from a local farmer is one of your best bets to ensure you're getting something wholesome. And, you'll be supporting the small farms — not the mega-farming corporations — in your area.

Another option is to join a community supported agriculture (CSA) program. Doing so can make a big difference in how well a small family farm can survive and thrive. As a CSA member, you buy a "share" of the vegetables the farm produces, and each week during growing season (usually May through October) you receive a weekly delivery of fresh food.

Joining a CSA is a powerful investment not only in your own health, but in that of your local community and economy as well. If you live in the U.S., the following organizations can help you locate CSAs and other farm-fresh foods in your area:

EatWild.com provides lists of certified organic farmers known to produce safe, wholesome raw dairy products as well as grass-fed beef and other organic produce. Here you can also find information about local farmers markets, as well as local stores and restaurants that sell grass-fed products.

The Weston A. Price Foundation has local chapters in most states, and many of them are connected with buying clubs in which you can easily purchase organic foods, including grass fed raw dairy products like milk and butter.

The FoodRoutes "Find Good Food" map can help you connect with local farmers to find the freshest, tastiest food possible. On their interactive map, you can find a listing for local farmers, CSAs and markets near you.

If you're still unsure of where to find raw milk, check out Raw-Milk-Facts.com and RealMilk.com. They can tell you what the status is for legality in your state, and provide a listing of raw dairy farms in your area.

The Farm-to-Consumer Legal Defense Fund also provides a state-by-state review of raw milk laws. California residents can also find raw milk retailers using the store locator available at www.OrganicPastures.com.

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